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The global steel industry is witnessing a shift towards usage of metal scrap in the hot metal manufacturing process. Hence, availability of scrap has become a key factor for determining competitiveness. Global scrap supply is tightening because exports are controlled by a few major suppliers like Japan, the EU and the US, whose prime focus remain domestic consumption. Over 75 countries have imposed export restrictions on metal scrap, and availability is expected to decline further by 2030.
Global Steel Industry Shifts Toward Scrap and Carbon Policies
The global steel demand is projected to grow from about 1.8 billion tons to 2.5 billion tons by 2070. The growth is expected to come from India, Southeast Asia, and Africa. While China’s demand is stabilizing due to weakness in its property sector, the production mix is also shifting, with Blast Furnace output expected to decline and Electric Arc and Induction Furnace methods increasing to nearly half of total production, driven by environmental policies and raw material limits.
Carbon regulations are reshaping global steel trade. Policies like the EU Emissions Trading System and CBAM are increasing costs for high-carbon steel, giving low-carbon steel a competitive advantage. This marks a shift from cost-based to carbon-based competition.
On the other hand, India is emerging as a major growth driver. Its steel output is expected to reach 165 million tons by 2027 and 223 million tons by 2030. This growth is leveraged through increasing demand for Iron Ore, Coking Coal, DRI, and Scrap.
However, India is currently facing scrap shortage due to its limited domestic supply and recycling capacity. India’s scrap consumption is around 41 million tons, and the deficit could reach up to 45 million tons by 2040, leading to continued reliance on imports.
Government policies and recycling initiatives are supporting scrap availability, while long-term decarbonization efforts, including hydrogen use, are still developing. Overall, the steel market is becoming more carbon-focused, where access to low-carbon raw materials will be critical for competitiveness.
